"We already know that there's going to be a stock sale. They have no choice. They need to raise money," he said. "I think there'll be a better opportunity if you want to be bullish on J.C. Penney to buy it. That being said, you can't be short this name. One of the big overhangs is now being removed."

"It just didn't make sense to be short the thing anymore," Najarian said, adding that the stock could climb in value.

"I'm not saying it doubles or triples, but I could easily see it get back to $18, and I wouldn't want to be along for the ride."

Rosecliff Capital's Mike Murphy said that it appeared that the company could run out of cash and cease to exist within the next four to six quarters.

"I think there's opportunity here if they can reverse that," he said. "If something comes out in the quarterly report or with management, or something positive comes out that says, 'Hey, take that off the table. No longer value our company stock on the fact that maybe we're going out of business within a year.' I think the stock's back to $20."